Saturday, September 24, 2011

Ruby Pipeline

Natural gas flows on the Ruby Pipeline (Ruby) have ramped up rapidly since the start of commercial operations on July 28, 2011. Ruby, a new high-pressure, 680-mile natural gas pipeline that links Wyoming natural gas supplies mainly to markets in California, currently delivers about 0.8 billion cubic per day (Bcfd) of natural gas to an interconnect with Pacific Gas & Electric (PG&E)—the major distributor of natural gas and retail power in Northern California—and provides about 30% of PG&E's 2.5 Bcfd of average daily system supply of natural gas.

PG&E's overall natural gas needs have changed little since late July when Ruby began flowing natural gas. However, Ruby's share of total natural gas supplied to PG&E rose from less than 0.1 Bcfd to over 0.8 Bcfd in a little over a month. Increasing flows from Ruby to PG&E have displaced natural gas delivered to Northern California by the Gas Transmission Northwest (GTN) pipeline (see chart below). Flows on GTN in early July were over 1.8 Bcfd; by mid-September GTN's flows sank to about 1.0 Bcfd. Natural gas flows on other pipelines such as El Paso Natural Gas, Southern Trails, and Transwestern have not varied as much following the advent of Ruby.

El Paso Corporation's Ruby Pipeline (Ruby), the largest natural gas pipeline project dedicated to serving the Western United States since the expansion of the Kern River system in 2003, received approval from the Federal Energy Regulatory Commission (FERC) to commence service on July 28, 2011. Initial scheduled volumes on Ruby's mainline heading west were about 65 million cubic feet.

Ruby transports natural gas from the Opal Hub in Wyoming west through Utah and Nevada and terminates at pipeline interconnects near Malin, Oregon. The initial design capacity of the 680-mile, 42-inch transmission pipeline is up to 1.5 billion cubic feet per day (Bcfd), increasing the regional capacity to move gas from the Rockies region to the West by over 50%. Ruby greatly enhances the ability to deliver natural gas into Northern California.

On July 30, 2010, Ruby received FERC approval to begin construction, which commenced the following day. The estimated in-service date for Ruby was Spring 2011, but project delays such as the onset of the nesting season for certain migratory birds slowed construction.

On July 11, 2011, Ruby requested authorization from FERC to commence service at a lowered Maximum Allowable Operating Pressure (MAOP): 10% lower than its designed MAOP. The reduced MAOP allowed Ruby flexibility to commence service prior to receiving approval from the Pipeline and Hazardous Material Safety Administration (PHMSA), which is required to flow natural gas at higher operating pressures.

Even at reduced pressure, Ruby will be able to fulfill its current firm capacity contract commitments of 1.2 Bcfd. Subsequently, Ruby will seek FERC authorization to raise its MAOP to the 1440 psig (pound-force per square inch gauge) level after Ruby obtains PHMSA's approval.